Vigilance and Risk Management Necessary for Stability
At the International Monetary Fund in Washington, Macklem mentioned the importance of vigilance and regular discussions with banks about risk management. He added that the Bank of Canada could provide liquidity if the domestic banking system faces severe strain.
Central Bankers Monitor Potential Credit Crunch
The failures of U.S. lenders Silicon Valley Bank and Signature Bank, followed by Credit Suisse's rescue, are prompting central bankers to closely monitor the potential for banking stress to trigger a credit crunch.
Bank of Canada Maintains Key Overnight Rate at 4.50%
On Wednesday, the Bank of Canada (BoC) held its key overnight rate steady at 4.50%. After raising rates eight consecutive times through January, the BoC has maintained rates at its latest two policy meetings, making it the first major central bank to pause it's tightening campaign.
Recession Risk Diminishes, Economy Remains Strong
The bank has pushed back against market expectations for a rate cut this year and indicated that the risk of a recession has diminished. Governor Macklem pointed out that the economy remains in excess demand, labor markets are tight, and unemployment is close to a record low.
